Multi-billion dollar Melbourne property developer Caydon collapses blaming Melbourne Covid lockdowns
Multi-billion dollar real estate developer collapses, blaming Melbourne’s Covid-19 lockdowns and rising interest rates for creating sales slump
- Caydon Property Group owned by recipients citing impact of Covid lockdowns
- The Melbourne-based developer is behind some high-profile projects
- It was the redevelopment of the famous Nylex site in Cremorne in the inner-east of the city
Yet another real estate and construction group has gone to the wall to blame the fallout of the Covid-19 pandemic, with recipients appointed to Caydon Property Group.
The multi-billion dollar Melbourne-based real estate group is behind a number of high profile projects in the southern capital, including the redevelopment of the Nylex monument in Cremorne in the inner-east of the city.
Non-bank lender OCP Asia, which has security over Caydon’s assets and property, appointed bankruptcy trustees McGrathNicol on Tuesday. Australian Financial Review reported.
The trustees will deal with completed residential and commercial real estate, land in development and land ownership of Caydon, founded 20 years ago by CEO Joe Russo.
Melbourne-based Caydon Property Group announced it had brought in receivers who blamed the city’s ‘prolonged’ Covid-19 lockdowns, plus escalating construction costs, supply chain delays and rising interest rate pressures as one of the reasons. to be placed under guardianship
Two projects still under construction, HOME in Alphington and Due North in Preston, will be completed and settled despite the bankruptcy, the trustees said.
Mr Russo blamed Melbourne’s ‘prolonged’ Covid-19 lockdowns plus the escalation of construction costs, supply chain delays and rising interest rate pressures as one of the reasons for being placed under receivership.
“Since Caydon’s inception, we have delivered some fantastic projects, including over 3,000 apartments, hotels and offices, which I am extremely proud of,” said Mr Russo.
“Unfortunately, Caydon has faced one difficult market situation after another in recent years. The latest and really confrontational challenge we’ve faced is the pricing drivers impacting the Australian real estate and construction industry.
“The significant disruption to our business as a result of two years of Covid-19 lockdowns in Melbourne has created uncertainty for business and a serious impact on sales.”
Spiraling material costs, stifled supply chains, fuel and vehicle price increases, difficulty finding staff and high wages have all combined to destroy the viability of some Australian construction and development companies
Mr Russo said the company will work closely with the liquidator to minimize “any disruption” to stakeholders.
The trustee said it would work to achieve ‘the best possible outcome’ for all parties involved by exploring options for development and/or sale of properties in Caydon.
The collapse follows a string of recent insolvencies among Australian builders.
Spiraling material costs, stifled supply chains, fuel and vehicle price increases, difficulty finding staff and high wages all combined to destroy business viability.
Builders Privium and BA Murphy were both liquidated late last year, while major construction companies Condev and Probuild also went bankrupt earlier this year.
Hotondo Homes, Inside Out Construction, Dyldam Developments, Home Innovation Builders, ABG Group, New Sensation Homes, Next, Pindan, ABD Group, Pivotal Homes, Solido Builders and Snowdon Developments are some of the other companies in the industry that are going under.